Shelter Afrique has signed EUR 3.77 million (Ksh. 450 million) ten-year concessional loan with Agence Française de Développement, AfD. The French public development finance institution also extended a grant of EUR 500,000 for capacity development.
Speaking at the signing ceremony Managing Director of Shelter Afrique, Mr. Alassane Ba thanks for extending the line and grant noting that The line of credit would be on-lent to selected Microfinance Institutions (MFIs) providing special housing products combined with technical assistance to support households with their projects to either buy, extend or renovate their houses.
“The objective is to set up a sustainable mechanism permitting lower income households to access home ownership and to improve their living conditions by expanding or renovating their homes at an affordable cost,” said Mr. Ba. “We believe that we will be able to achieve this by working closely with Microfinance Institutions.”
“We will use the grant to support the implementation of our social housing programme by providing capacity building to the institution as well as Microfinance institutions entering the housing segment in areas of feasibility studies in relationship with social/affordable housing financing scheme, policy dialogue for the implementation of a sponsored social housing fund and the organization of an international social housing conference,” said Mr. Ba.
French Ambassador, H.E Rémi Maréchaux who signed the deal on behalf of Agence Française de Développement lauded the move urging other donors to put more focus on funding social housing projects.
“We know this isn’t enough measured against the current needs in the development of low cost housing and it will benefit but between 250 and 500 households it sets the ball rolling. The more than 60% of the Kenyan population living in slums deserves better housing and that’s why we are taking affordable housing seriously,” said H.E Maréchaux.
A strategic priority
In recent years, Shelter Afrique has increased its efforts to make low-income housing a strategic priority. Its Social housing programme was designed specifically to provide mortgage facilities and housing to low-income earners and people at the bottom of the pyramid.
“We recently a low cost housing financing deal with Rafiki Microfinance Bank where Rafiki Microfinance Bank will disburse loans as low as Ksh. 20,000 for home improvement, going up to Ksh. 5 million for mortgages in any part of the country. We will be working with more of such institutions to realize low-cost housing dream for the lower end of the pyramid,” said Mr Ba.
The project, which is initially being piloted in Kenya to better estimate its impact, shall later be replicated at a larger scale in other African countries.